Ulli... The ETF Bully

Major Indexes Up Above 1% On Solid Earnings Reports

Ulli Tuesday, 28 October 2014, 3:41 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities rocketed upwards today after investors were encouraged by multiple solid earnings reports as well as a rise in consumer confidence. The Dow gained 1.12% and closed about 17,000 for the first time since October 3^rd. The S&P 500 rose 1.19% and the Nasdaq led the pack gaining 1.74%.

Tech stocks in the Nasdaq got a boost today from the surge in Alibaba (BABA) shares, which pushed past $100 a share for the first time. Apple (AAPL) also gained upon rumors that Alibaba might be working with Apple and its Apple Pay initiative. On the flip side, both Twitter (TWTR) and Facebook (FB) shares took a dive today after releasing less than attractive earnings reports and revenue projections.

In the economy, it was reported today that consumer confidence rose sharply in October, reaching its highest level in seven years despite the volatile stock market and global economic weakness. Outlook rose to 94.5 from 89 in September.

Finally, The Federal Reserve opened a two-day meeting today amid volatile markets and a slowing global economy, but economists say it’s likely to send a stay-the-course message that foresees an increase in near-zero interest rates by mid-2015. The news that got downplayed was that QE officially ended today; so, will the stock market be able to stand on its own legs? I would not hold my breath, but we will find out in due time.

Stocks End Mixed After Record Week

Ulli Monday, 27 October 2014, 4:27 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks took somewhat of a “breather” on Monday, closing mixed just after coming off the best weekly performance of the year. The biggest drag on the markets was that oil prices fell to $80 a barrel, which marks a notable decline from the $107 price in June. Sinking oil prices suggests weakening global growth and signals that supply is outstripping demand. Oil prices are at their lowest levels since June 2012 and more than 20% below their 2014 highs. The S&P 500 dipped 0.13%, but the Dow rose 0.1% and the Nasdaq also added 0.1%.

In earnings news, this earnings season has seen more than 7 out of 10 companies, or 71.4%, in the S&P 500 top third-quarter earnings forecasts, better than the long-term average of 63%. So far, earnings growth is on track for a gain of 7.7%. This week was poised for a batch of earnings announcements from nearly 160 companies. Later this week will bring reports from Caesars (CZR), Electronic Arts (EA), Pfizer (PFE) Starbucks (SBUX) and Facebook (FB).

And in economic news, The Federal Reserve is expected to close a chapter in history this week and announce the conclusion of its massive stimulus program. Let’s stay tuned for this announcement and see if there are any immediate effects on market direction.

ETFs/Mutual Funds On The Cutline – Updated Through 10/24/2014

Ulli Monday, 27 October 2014, 5:47 AM ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 410 ETFs, of which currently 210 (last week 105) are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of some 97 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 35 ETFs (last week 16) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 498 (last week 111) above the line and 352 below it out of the 850 that I follow.

Take a look:

1. ETF Master Cutline Report

2. ETF High Volume Cutline Report

3. MF Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

One Man’s Opinion: Will Capital Expenditures Rise In Sectors That Can Take Advantage Of Cheap US Energy Prices?

Ulli Sunday, 26 October 2014, 6:02 AM Market Review Contact

The US economy is held back by slow growth in exports amid other struggling major economies, said Russ Koesterich, chief investment strategist at BlackRock Inc. For much of the last 20 years, the US consumers have been the engine of growth, even when global economies didn’t do particularly well.

The US consumer is doing okay, but the economy is still in an environment of slow-age growth and fairly high debt levels, which is constraining consumption, as evidenced in every consumer spending report, he said.

Asked if something different could come out of the current crisis, i.e. a “new globalization,” Russ said ideally the global economy is likely to witness a rebalancing, which involves more consumption in key emerging markets like China and arguably involves more investment in several developed markets, particularly in the US and Europe.

New ETFs On The Block: iShares Currency Hedged MSCI Emerging Markets ETF (HEEM)

Ulli Saturday, 25 October 2014, 5:59 AM Currency ETFs Contact

San Francisco-based iShares, the biggest issuer of exchange-traded funds, recently expanded its offerings in the emerging-market niche with the launch of the iSharesCurrency Hedged MSCI Emerging Markets ETF (HEEM).

The new fund is the currency-hedged edition of BlackRock’s popular emerging-market focused iShares MSCI Emerging Markets ETF (EEM) and should find favor with investors who wish to protect their earnings from a surging dollar.

The passively-managed fund tracks the MSCI Emerging Markets 100 percent USD Hedged Index and consists of large- and mid-cap common stocks from companies across more than 20 EM countries including South Korea, Taiwan, Russia, India, China, Brazil, Czech Republic, Hungary, Greece, Colombia, Peru, Poland, Qatar, Chile, Malaysia, South Africa, Mexico, the Philippines, Turkey etc.

10-24-2014

Ulli Friday, 24 October 2014, 5:41 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For October 24, 2014

ETF/No Load Fund Tracker StatSheet

————————————————————-

THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2014/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10232014/

————————————————————

Market Commentary

Friday, October 24, 2014

STOCKS POLISH OFF A SOLID WEEK OF GAINS AMIDST VOLATILITY

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks finished notably higher on the week driven by solid U.S. economic data and corporate earnings reports. The 4.15% increase in the S&P 500 was the best weekly gain since the first week of 2013. Though markets remain volatile, Wall Street appears to focus on fundamentals as the U.S. economy continues to improve.

Investors have been buying up on the back of corporate earnings, with Caterpillar (CAT) raising earnings expectations, 3M (MMM) posting better sales across its business, Apple (AAPL), Texas Instruments (TXN) and Yahoo (YHOO) all besting expectations. However IBM (IBM), Coca-Cola (KO) and Amazon (AMZN) all fell after disappointing on earnings and forecasts.

Markets are predicted to remain attuned to the news from overseas as we head into next week, particularly from the Eurozone (Ebola/stimulus) and China (GDP growth), as well the U.S. Ebola situation and the Fed meeting next Wednesday.

For the second day in a row 9 of our 10 ETFs in the Spotlight gained while one lost. For more detail on how this rally affected our TTIs, please see section 3 below.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

Here are the 10 candidates:

The above table simply demonstrates the magnitude with which some of the ETFs are fluctuating in regards to their positions above or below their respective individual trend lines (%M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.

Year to date, here’s how the above candidates have fared so far:

To be clear, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point has been taken out in the “Off High” column.

3. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) joined this week’s rally generating a new Buy for the domestic one on 10/22/14. While the international one greatly improved, it still remains stuck in bear market territory.

Here’s how we ended the week:

Domestic TTI: +1.54% (last Friday -0.22%)—Buy signal since 10/22/2014

International TTI: -2.40% (last Friday -4.75%)—Sell signal since 10/1/2014

Have a nice weekend.

Ulli…

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

————————————————————-

READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

Reader Dennis:

Q: Ulli: Your blog is VERY much appreciated, especially your book “How to Beat the S&P using the S&P 500…” Question: Does your proprietary Domestic TTI affect the way the HOT LIST of 10 ETF’s are managed? If I am tracking correctly, not all of the ETF’s on a Sell have reached a 7.5% sell-stop…have they?

A: Dennis: Yes, the TTIs affect the 10 ETFs in the Spotlight. Absent of any major downturn and, while the TTIs are on the plus side of their respective trend lines, the trailing sell stops give you the signal when to exit the market.

However, if the TTIs move into bear market territory before a trailing sell stop is triggered, then they will override the sell stop discipline. It is the indicator which has reliably signaled major trend changes in the market for some 25 years.

To clarify again, if the International TTI drops below its trend line, it will affect all “broadly diversified international mutual funds/ETFs.” If the Domestic TTI drops below its trend line, all “broadly diversified domestic mutual funds/ETFs” are affected.

Sector and Country funds should be sold based on their respective sell stops giving the signal.

———————————————————-

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

———————————————————

Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/